Las Vegas Monorail trustee draws on reserve, surety to pay interest

By Caroline Salls

Pittsburgh, July 2 - Las Vegas Monorail Co.'s revenue bond trustee was forced to draw on a debt service reserve fund and surety bond to make interest payments due July 1 on the bonds because the company failed to fund the related debt service accounts, according to a notice to bondholders.

Specifically, a $9.63 million first-tier interest payment and a $5.49 million second-tier interest payment were due on the bonds on Wednesday.

A $3.77 million draw was made on the surety bond to make the first-tier interest payment.

Bond trustee Wells Fargo Bank NA said the first-tier debt service reserve fund now has a zero balance, and there is $17.22 million outstanding on the surety bond.

The second-tier debt service fund had a zero balance before the July 1 interest payment, and Wells Fargo said the funds available in the second-tier reserve fund were insufficient to make the second-tier interest payment in full.

The trustee said it received direction from the bondholders to withhold $1.5 million in the second-tier debt service reserve fund to allow it to make a $1.8 million partial payment to the second-tier bondholders.

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